Yesterday I took a look at a number of shares which had recently found favour with brokers and had been given buy ratings.
This morning I thought I would look at the shares that brokers think you should avoid. Here are three shares which have been given sell ratings this morning:
Metcash Limited (ASX: MTS)
A research note out of Deutsche Bank reveals that its analysts have reiterated their sell rating and $1.60 price target on the wholesaler's shares ahead of its full-year results next week. Deutsche is concerned that Aldi's expansion and a supermarket price war could be having a negative impact on its groceries business. I'm with Deutsche on this one. In my opinion Metcash looks likely to be the biggest loser from Aldi's expansion. Things could get even worse in the future if Amazon decides to join the Australia groceries market.
Monadelphous Group Limited (ASX: MND)
Deutsche Bank has also reiterated its sell rating on Monadelphous for valuation reasons. According to the note, its analysts have a price target of $8.95 on the engineering company's shares, approximately 34% lower than its current share price. With its shares changing hands at 22x annualised earnings, I feel Deutsche may be right to label its shares overvalued. I wouldn't be a buyer at the current price.
QBE Insurance Group Ltd (ASX: QBE)
Despite the sharp drop in its share price yesterday, analysts at Credit Suisse have retained their underperform rating and reduced the price target on the insurance giant's shares to $12.00. According to a research note, its analysts believe QBE's shares are about fair value now following yesterday's decline, but they still see potential risks to the downside. Whilst I think QBE could be worth considering at the current share price, it wouldn't be my first pick in the insurance sector.
